Recent Work by ITEP

Amazon in Its Prime: Doubles Profits, Pays $0 in Federal Income Taxes

February 13, 2019 • By Matthew Gardner

Amazon, the ubiquitous purveyor of two-day delivery of just about everything, nearly doubled its profits to $11.2 billion in 2018 from $5.6 billion the previous year and, once again, didn’t pay a single cent of federal income taxes.

A Tale of Two States: How State Tax Systems Perpetuate Income Inequality

February 11, 2019 • By ITEP Staff

To explain how state tax systems make income inequality worse, we compared tax systems in New Jersey and Texas which, before taxes, have similar levels of income inequality. This comparison provides an example of how policymakers’ decisions affect the economic wellbeing of their constituents.

Trends We’re Watching in 2019

February 7, 2019 • By ITEP Staff

This year is full of opportunity for state policymakers and advocates seeking to improve upside-down tax systems and generate needed funding for shared priorities. In a series of blog posts, ITEP staff summarize key trends we are watching in statehouses this year, with special attention to the many efforts underway to reduce racial and economic inequities and better prepare state budgets for the next recession and reduced federal investments. Along the way, we’ll also draw attention to some of the more destructive policy ideas to watch for in 2019.

Trends We’re Watching in 2019: Attempting to Double Down on Failed Trickle-Down Regressive Tax Cuts

February 7, 2019 • By Lisa Christensen Gee

It’s always troubling for those concerned with adequate and fair public finance systems when states prioritize tax cuts at the cost of divesting in important public priorities and exacerbating underlying tax inequalities. But it’s even more nerve-racking when it happens on the eve of what many consider to be an inevitable economic downturn.

Trends We’re Watching in 2019: Cannabis Tax Implementation and Reform

February 7, 2019 • By Carl Davis

Few areas of state tax policy have evolved as rapidly as cannabis taxation over the last few years. The first legal, taxable sale of recreational cannabis in modern U.S. history did not occur until 2014. Now, just five years later, a new ITEP report estimates that recreational cannabis is generating more than $1 billion annually in excise tax revenues and $300 million more in general sales tax dollars.

Trends We’re Watching in 2019: Consumption Taxes: the Good, Bad and the Ugly

February 7, 2019 • By ITEP Staff

Consumption taxes are a significant source of state and local revenue, and we expect that lawmakers will continue to adjust state consumption tax levies to adapt to budget needs and a changing economy.

Trends We’re Watching in 2019: Addressing Lingering Federal Conformity Questions and Opportunities

February 7, 2019 • By Dylan Grundman O'Neill

In our last update on state responses to the federal tax cut (Tax Cuts and Jobs Act, or TCJA), we noted that several states were waiting until 2019 to make their final decisions, giving them additional time to (hopefully) respond in ways that improve their fiscal situations and upside-down tax codes. The TCJA is affecting the 2018 federal taxes people are filing now, in some cases adding urgency and/or confusion to these debates.

Trends We’re Watching in 2019: Raising Revenue and Spending Surpluses to Prioritize Critical Public Investments

February 7, 2019 • By Lisa Christensen Gee

A second notable trend in 2019 is states raising revenue to address longstanding needs and states allocating their surpluses to invest in critical public priorities such as early childhood programs, education and other human services.

Trends We’re Watching in 2019: The Use of Targeted Tax Breaks to Help Address Poverty and Inequality

February 7, 2019 • By Aidan Davis

Continuing to build upon the momentum of previous years, states are taking steps to create and improve targeted tax breaks meant to lift their most in-need state residents up and out of poverty. Most notably, a range of states are exploring ways to restore, enhance or create state Earned Income Tax Credits (EITC). EITCs are an effective tool to help struggling families with low wages make ends meet and provide necessities for their children. The policy, designed to bolster the earnings of low-wage workers and offset some of the taxes they pay, allows struggling families to move toward meaningful economic…

Shared Prosperity: A Progressive Approach to Marginal Tax Rates

February 6, 2019 • By Steve Wamhoff

Panel: In recent years, economists have been engaged in robust academic debate over the top marginal tax rate, with leading researchers estimating the optimal rate to be 73 percent or even higher. Yet despite widespread public support for raising the rate from its current level of 37 percent, many policymakers and media figures have demonstrated misunderstandings over what marginal tax rates are and how they work.